ElectionsDiscuss Trump calls for $10 hour minimum wage at the Political Forums; Originally Posted by foundit66
No. Actually we can't argue all day long.
Liberals bring facts to the table.
The reason ...

The federal minimum wage has been in effect since The Great Depression. Recently, it has become a hotly contested issue. Should it be raised or not? Some ask if it should exist at all. How do you reconcile the burden on small businesses with the needs of the worker? Moreover, how does the minimum wage affect the profitability of a business? These are some of the issues we’ll examine in this article. We’ll also discuss the history of the minimum wage, who receives it, and the effect an increase would have on the economy and the American business.

History of The Minimum Wage

The minimum wage was signed into law by President Roosevelt on June 25, 1938 as part of the Fair Labor Standards Act of 1938. The first minimum wage was $0.25 per hour (equivalent to $4.18 today) and affected about 20% of the entire labor force. In 2012, according to the Bureau of Labor Statistics, there were 74.6 million workers over age 16 who were paid an hourly wage. Of this group, about 4.7% or 3.5 million were paid the minimum wage or lower. The following chart illustrates the percent of hourly workers, by age and gender, who earned the minimum wage or less in 2012.

Min Wage-2

Recommended by Forbes
How Secure Is Social Security?
Is The Social Security Trust Fund Solvent?
Obamacare: Penalties And Exemptions
The U.S. Debt: Why It Will Continue To Rise
MOST POPULAR Photos: The Top 20 Donors To Hillary Clinton's Super PAC
Facebook Could Owe IRS Billions, Continues To Ignore Tax Summons
MOST POPULAR Photos: The Most Expensive Home Listing in Every State 2016
MOST POPULAR Pokemon No: How Not To Play The Game

As you can see, minimum wage earners tend to be young and female. The group with the greatest percentage of workers paid at or below the minimum wage is the leisure and hospitality industry (19%).

Debating the Merits of the Minimum Wage

FidelityVoice
Stock Ideas For The Late Cycle
Is the minimum wage a good thing? It depends on who you ask. For example, famed economist Milton Friedman was opposed to a minimum wage stating that, “…people whose skills are not sufficient to justify that kind of a wage will be unemployed.” He further conveyed that it was no coincidence that the unemployment rate for teens at the time was twice that of adults. Of course this was taken from an interview conducted several decades ago. More recently, Nobel Prize winning economist Paul Krugman debunked this argument by suggesting that raising the minimum wage to $15 per hour would not cause big companies like McDonald’s to cut jobs because these jobs cannot be moved overseas or replaced by machines. He’s probably partly correct about a large company like McDonald’s. However, many smaller companies might disagree. As I’ve stated, the merits of raising it depends on who you ask. Personally, I have no dog in the hunt. Although I do have an opinion after examining the facts, I have no bias on the matter. Another proponent is the U.S. Department of Labor which suggests that raising the minimum wage would help the economy in a number of ways. For example, it would increase consumer purchasing power and reduce employee turnover. I’ll address that in a moment.

The Effect of the Minimum Wage on Economic Growth

Would raising the minimum wage to $15 per hour help our economy? Follow along as I provide some facts (data is from 2012-13). The total U.S. labor force was roughly 158.7 million. About 47%, or 74.6 million workers, were paid an hourly wage. Of all hourly workers, about 4.7%, or 3.5 million, earned a wage equal to or below the minimum wage. For our discussion, let’s assume the entire group earned the current minimum wage. If you multiply the number of workers who earned the minimum wage by the current minimum wage, you’d get the total wages earned by this group per hour (3.5 million workers X $7.25 per hr = $25.4 million). If the minimum wage is increased to $15 per hour, the total wage earned by this group would be approximately $52.6 million per hour or $78.9 billion per year (assumes 30 hours per week, 50 weeks per year). The increase in annual pay would be approximately $40.8 billion ($78.9 billion – $38.1 billion). If we exclude all taxes and assume 100% of the increase was spent on various goods and services, it would equate to 0.23% of total U.S. GDP ($40.8 billion / $18 trillion). Here’s my point. This increase, even if completely spent (which is doubtful), would not be very significant. Therefore, in my view, the economic benefit “argument” is a red herring. What should a worker be paid?

How Much Should a Worker Be Paid?

Most agree that a worker should be paid what he or she is worth. In other words, a worker should be paid a wage commensurate with the skills required for the job. Under this assumption, the minimum wage argument is weak. Why? First, in a true, free-market economy (which is not what we have), the labor market would set the rate of pay for all jobs based on a number of factors. Consider this. Should a 16 year old flipping burgers at McDonald’s be paid the same as a 30 year old single mother working as a certified nursing assistant? Currently, these vocations receive about the same wage. What does the single mother’s maternal status have to do with her rate of pay? Nothing really. But this is the type of argument we find today. It’s all about the poor, suffering, and needy and how the government will fix all of our woes. Don’t misunderstand, I feel for these people, regardless of the circumstances which brought them to a difficult place. Even if it’s all their own doing. I’m simply trying to make a point that economics are blind to emotion. There is another possible downside to a drastic increase in this wage.

Raising the minimum wage from $7.25 to $15.00 could put pressure on other lower-paying jobs which pay slightly more than the existing minimum. This could cause stress in the compensation structure of many small businesses. In fact, any mandate from the government which increases the cost of doing business could result in a number of consequences, mostly negative. First, it could cause prices to rise as businesses attempt to protect profit margins. Next, it could cause a loss of jobs if the business is forced to reduce expenses, again, to maintain profitability. It could also lead to an increase in automation, depending on the specific job. Finally, it could have little or no effect on small businesses, if an adequate profit margin already exists and the owner is willing (or able) to absorb the additional expense.

Conclusion

Even though it’s true that raising the minimum wage would result in more money for those who receive it, because it is so low (hence the word minimum), it would have very little effect on the U.S. economy. Therefore, I think this is more about class envy than anything else. And, like so many arguments today, you can’t overlook the political component.

Despite efforts to the contrary, America is still the “Land of Opportunity” for those who will roll up their sleeves and work hard to obtain the necessary skills for a higher paying position. A minimum wage job, after all, should never be the end game. Rather it should be a beginning step in the career path for those inclined to improve their circumstances. Unfortunately, we have a country filled with individuals who are satisfied with a welfare check, but who are fully capable of working and becoming a productive member of society. If government really wants to help our economy, it’ll focus on getting people off of entitlements and back to work.

Of course the analysis considers raising the minimum wage in isolation, workers making less than the new minimum wage or close to it would naturally expect to receive a pay increase in excess of the new minimum.

As the article ultimately concludes, the ultimate end of increasing minimum wage or the so-called living wage is political, it is a vote buying scheme.

The Following 2 Users Say Thank You to AZRWinger For This Useful Post:

I think it was a bit of pandering, but most jobs now start at ten bucks an hour. My much older sister just got a job at Home Depot to supplement her retirement income and they started her at ten bucks an hour, and she only works 20 hours a week.

Just my two cents for what its worth.

__________________
Sometimes by losing a battle you find a new way to win the war.

There is always a minimum wage to start from. Where agenda driven people differ is in the presumption that the minimum wage is in any way related to your goal. Liberals presume that there are people that believe that minimum wage is being all that you can be and therefore the government must step in and help the unfortunate. Conservatives think it's just a very temporary start.

minimum wage should have risen incrementally along with profits over the past 30 years. with the exception of the 90s they didn't
that long stretch got minimum wage out of balance severely

minimum wage should have risen incrementally along with profits over the past 30 years. with the exception of the 90s they didn't
that long stretch got minimum wage out of balance severely

So with that logic we should tie earnings to wages. And when earnings are down, so we cut wages the same amount?

What planet are you from? This world doesn't work that way. Pay, at the minimum wage level should have nothing to do with earnings. That privilege is the realm of the investor, stock holder. Not a hourly employee.

Things seem to be going pretty well since Seattle bumped the hourly minimum wage for large businesses up to $11 last year, from the statewide minimum of $9.47 an hour. Low-wage workers are getting more time on the job and making more money. Fewer businesses are closing, and more new ones are opening. The technology and construction sectors are booming. Even the weather cooperated for a change. The spring was unusually dry in Seattle, which was good for the city's fishing fleet.

Yet the actual benefits to workers might have been minimal, according to a group of economists whom the city commissioned to study the minimum wage and who presented their initial findings last week.

The average hourly wage for workers affected by the increase jumped from $9.96 to $11.14, but wages likely would have increased some anyway due to Seattle's overall economy. Meanwhile, although workers were earning more, fewer of them had a job than would have without an increase. Those who did work had fewer hours than they would have without the wage hike.

Accounting for these factors, the average increase in total earnings due to the minimum wage was small, the researchers concluded. Using their preferred method, they calculated that workers' earnings increased by $5.54 a week on average because of the minimum wage. Using other methods, the researchers found that the minimum wage hike actually caused total weekly earnings to drop -- by as much as $5.22 a week.

There can be negative effects. Increasing the minimum wage increases the costs of hiring workers. As a result, employers must accept reduced margins or customers must pay steeper prices.

If employers cannot stay in business while paying their staff more, they will either hire fewer people or give their workers fewer hours. As a result, even if wages per hour increase, workers' total earnings could decline.

Jacob Vigdor, an economist at the University of Washington and one of the authors of the report, speculated that technology could limit the benefits of increasing the minimum wage. If it becomes easier for employers to replace their workers with machines, they will be more likely to respond to wage hikes by making fewer hires.

"The economy has changed in ways that give businesses more options for cutting back on labor," Vigdor said. "If you are a person who is trying to make ends meet at the lower rungs of the economic ladder, you might be used to this idea that forces conspire against you. The minimum wage is an effort to try to keep some of these forces at bay, but there are definitely questions about how effectively and for how long."

So with that logic we should tie earnings to wages. And when earnings are down, so we cut wages the same amount?

What planet are you from? This world doesn't work that way. Pay, at the minimum wage level should have nothing to do with earnings. That privilege is the realm of the investor, stock holder. Not a hourly employee.

Regards, Kirk

minimum wage was increased incrementally as the cost of our living increased. it stopped in the eighties and again in 2000's thats at least 16 years with no increase in minimum wage. during that time housing, and gas and just about everything else did increase. so minimum wage could not be considered an entry level wage after so long a time. and yes profits increased I am pointing out to show the minimum increases could have easily been absorbed in increments.
but by now there is real crisis in america cause during the same time period, construction jobs left due to over building; factory jobs went elsewhere due to nixon, reagan, bush 1, and clinton's shi**y trade deals also because of trade laws that were struck down.
in preparation for this, the government faked a crisis to bust a few big unions. without unionization being stronger, the trade deals were allowed to proceed unheeded. I say this not because I am pro union -which I am- but because a contract is a contract.

anyway we are at a place where a minimum wage person or even a 9 dollar an hour person can never do like many did in the 70's and work part time and go to school or training to get a better job.